So, Microsoft and Yahoo agreed to disagree and parted ways. Now, Carl Icahn thinks that he can make a quick buck. I began to wonder if this can be a possibilty. While the numbers as reported by WSJ seem to indicate that they will make the money, I don’t know if is the move that Microsoft would have seen happen. Microsoft was very much interested in Yahoo as a company (infrastructure & team). With Icahn’s move now, Y! is forced to make a deal with Google and possibly a few more and no matter what happens – Icahn wins or looses, I believe it is now end game for Yahoo.
Icahn wins: They will try to sell to Microsoft. But, this forced marriage will force employees to quit in mass – Google is waiting with open arms for them. Also, too much uncertainity will put projects on the brink of disaster and what Microsoft will get out of this will be left overs. I believe Steve Ballmer is seeing this and probably may not agree to this deal. If the employees do leave, then the integration will not happen and this will cause more headaches for Microsoft than anything else – add current MSFT employee dissatisfaction to the deal today.
So, Icahn’s plan B will be to sell Y!’s assets piece by piece.
Both of these moves by Icahn will be a disaster for small business who host on Y! or run their business on their infrastructure (data feeds, APIs, check out, hosting, email, etc)
Icahn looses: He sells stock and forces other action. Y! board will spend more time on defending rather than moving forward. So, the value of the property will go down.
In Summary, I really don’t see a good exit for Yahoo! Google will become even more powerful and Microsoft will be legacy.
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